Income Tax Act 2007 section 735B

Historical liability under section 733A where remittance basis applied

Section 735B deals with how income taxed on a settlor under the transfer of assets abroad rules for the tax years 2017-18 to 2024-25 is treated where the settlor was on the remittance basis during those years, and the tax liability had been shifted from the beneficiary to the settlor under section 733A.

• This section applies where income was deemed to arise to a beneficiary under section 732 for any tax year from 2017-18 to 2024-25, the settlor was liable for tax on that income under section 733A, and the remittance basis applied to the settlor for the relevant year.
• The income in question — termed "transferred-liability deemed income" — is classified as relevant foreign income of the settlor, meaning it is only taxable when remitted to the UK.
• Where any benefit or relevant income is linked to the transferred-liability deemed income for the beneficiary's purposes under section 735, that same benefit or income is treated as deriving from the transferred-liability deemed income for the settlor's remittance basis purposes.
• When section 832 of ITTOIA 2005 is applied to this income, paragraph (b) of subsection (2) of that section is disregarded, removing a condition that would otherwise need to be satisfied for the remittance basis charge to apply.